Abstract
How sticky were wages during the Great Depression? Although classic accounts emphasize the importance of nominal rigidity in amplifying deflationary shocks, the evidence is limited. In this paper, I calculate the degree of nominal wage rigidity in the United Kingdom between the wars using new granular data covering millions of wages.
I find that nominal wages were more flexible downwards than in most modern economies, but that the frequency and magnitude of wage cuts were too low to fully offset
deflation.
I find that nominal wages were more flexible downwards than in most modern economies, but that the frequency and magnitude of wage cuts were too low to fully offset
deflation.
| Original language | English |
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| Publication status | Published - 2021 |
Publication series
| Name | LSE Economic History Working Papers |
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| Publisher | Economic History Department, London School of Economics and Political Science |
| No. | 332 |
Subject classification (UKÄ)
- Economic History